Download managerial project part 2

DIRECT MATERIALS INVLOVED IN PRODUCTION
Production of a complete unit of monopoly requires several direct materials some of which should be
further processed and then assembled in our company. The playing board will be made of cardboard
and covered with posterboard, we will also need chipboard for the production of the cards and paper
for the production of the currency notes. The company will also buy corrugated cardboard for the
making of the box in which to put the monopoly unit when assembled. There will be a certain amount
on ink used to fill printer cartridges as well as plastic to manufacture the tokens and the attributes. For
each monopoly unit we need two dice which we will buy online. All raw materials and components are
going to be ordered in relatively large quantities.
Material costs per unit
$
cardboard for the playing board
chipboard sheets for the cards
paper notes
corrugated cardboard for the box
posterboard
ink for printer
two dice
plastic for tokens
plastic for attributes
0.6687
0.5270
0.2398
1.3360
0.4349
1.9819
0.1038
0.0815
0.0815
TOTAL
5.4550
1)cardboard
http://www.amazon.com/EcoSwift-Chipboard-Cardboard-ScrapbookScrapbooking/dp/B007NKAB0Y/ref=sr_1_5?ie=UTF8&qid=1448912988&sr=85&keywords=cardboard+sheets
2)chipboard
http://www.amazon.com/Silhouette-America-Chipboard-12-Inch-25Pack/dp/B00B4AUFPA/ref=sr_1_2?ie=UTF8&qid=1448911595&sr=8-2&keywords=chipboard+sheet
3)paper
http://www.amazon.com/Georgia-Pacific-Standard-Multipurpose-8-5x11-Inch998606/dp/B00BB5DJU6/ref=sr_1_1?ie=UTF8&qid=1448911009&sr=8-1&keywords=paper+sheets
4)ink
http://www.amazon.com/KDice-100-White-Dice-8mm/dp/B00Q430EWQ/ref=sr_1_7?s=toys-andgames&ie=UTF8&qid=1448913070&sr=1-7&keywords=dice
5) plastic
http://plastic-bg.com/tag/%D0%B8%D0%B7%D0%BA%D1%83%D0%BF%D0%BD%D0%B8%D1%86%D0%B5%D0%BD%D0%B8%D0%BF%D0%BB%D0%B0%D1%81%D1%82%D0%BC%D0%B0%D1%81%D0%B8/
6) poster board
http://www.amazon.com/Roaring-Spring-Poster-InchesSheets/dp/B00HWV3NFO/ref=sr_1_1?ie=UTF8&qid=1448909922&sr=81&keywords=posterboard+50x+50
7 ) corrugated cardboard
http://www.amazon.com/EcoSwift-8-5x11-Corrugated-CardboardInserts/dp/B00YGPYT34/ref=sr_1_1?ie=UTF8&qid=1448910968&sr=81&keywords=corrugated+cardboard
8) dice
http://www.amazon.com/KDice-100-White-Dice-8mm/dp/B00Q430EWQ/ref=sr_1_7?s=toys-andgames&ie=UTF8&qid=1448913070&sr=1-7&keywords=dice
DIRECT LABOR INVOLVED IN PRODUCTION
Our company will need to hire 5 workers, two of them will work in the machine department and the
other three in the assortment and assembly department which is more labor intensive. The plastic
injection molding machine (which produces the plastic attributes and tokens), the plastic wrapping
machine (which wraps up the readily assembled monopoly units) and the printing press will be operated
by one employee. The cardboard folding and glueing machine, which produces the boxes in which the
monopoly parts are assembled, requires more direct labor than the rest of the machines so one
employee will be assigned to operate it. Two more workers will be needed to sort out the elements and
arrange the materials required for production and then the last worker will assemble the full monopoly
unit, placing all its elements in the box. The workers are going to work simultaneously so one fully
prepared unit will need about 7 minutes of Direct Labor time. Our employees will be full-time workers
with fixed pay of 264 $ (450 lv) per month plus employer payroll taxes of 53 $ (90 lv) or 20% of salary.
Given the fact that in 2016 there will be 252 workdays and each employee is entitled to 20 workdays of
paid leave the number of days that our company will operate will be 232. Our Direct Labor cost per year
amounts to 19008 $ (32400 lv), we are going to produce 60 units per day which makes DL cost per unit
1.366$.
SELLING PRICE
The total cost of the monopoly unit amounts to 9.13 $ and there will be a mark-up of 31% which makes
the selling price for our product 11.96$. This price is low compared to the ones offered by other
producers and retail stores. However, we are not selling our product directly to consumers, instead we
will sell to shops and they will also place some mark-up on our price.
Concerning the feasibility of our product we can state that it is sufficiently high mostly because of the
low price we charge. Our price is times lower than what our competitors charge and the units we
produce will satisfy the demand. Demand for board games has been constant and so we do not expect
any surges and falls; we estimated that we will produce just the right amount of units in order to sell
them all.
The NPV or net present value of our product is 294 430 $ which is a very high number. The rule is that
should the NPV be greater or equal to zero the business proposal is worth the investment. Our IRR is
also very high- 119.08%. Estimating the discount factor in Bulgaria to be around 10% and having in mind
the rule that if the IRR is greater than the discount factor we should invest in the business it is perfectly
clear that our internal rate of return is pretty high. The payback period for our investment is 1 year and
2 months; after that period we start generating profits.
These good figures can give us the chance to expand our business in future and start producing other
types of board games. We can also buy better and more expensive machines in order to increase the
number of units we produce and improve their quality. In the long term our company can also raise the
employees’ salaries to give them more incentives to work better. We also have the idea of launching a
Deluxe version of monopoly at some time, a higher quality and more expensive one.
http://www.pazaruvaj.com/igri-na-dyska-c3805/originalnijat-monopol-adaptiran-izcjalo-na-bylgarskii-proizveden-specialno-za-bylgarskite-fenove-v-zavodite-na-parker-v-irlandija-monopoli-e-najpopuljarnata-igra-v-sveta-i-tova-e-taka-veche-desetiletija-p48093286/?gclid=CPygLGkz8kCFUEcGwodYgcMpA
https://www.orangecenter.bg/monopoli-bg.html
http://www.hippoland.net/igra-monopoly